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What The US Government Spent Its Money On In 2013

Tyler Durden's picture




 

Still living with the misguided idea that the bulk of government spending goes to defense? Wrong. As the just released Treasury refunding presentation shows, for yet another year in a row, the bulk of government outlays was for Medicare and Medicaid, as well as Social Security, both amounting to just shy of $900 billion in 2013, a sizable increase compared to the prior year. Defense spending? It declined once again to just over $600 billion, as did Interest outlays, which net of the Fed's remittances on interest payments, declined from under $500 billion to just about $400 billion in the past year.

The other tiems were largely in line, and far less material to the US government's spending addiction.

So how did the government fund these outlays? Well in addition to net debt issuance of just over $1 trillion in the 2013 fiscal year, the other more traditional sources of funding - tax receipts - were the following:

Notably, while monthly individual income taxes rose on an LTM basis to a record $110 billion as a result of changes to the tax code in early 2013, corporations continue to see their overall income taxes decline as more seek offshore tax shelters, and avoid paying US taxes while building up record cash hoards.

This is also visible on the following chart of Y/Y percentage changes in tax receipts, showing that for the first time in years, corporate taxes are about to decline compared to the previous year.

Ironically, corporations may be people as per the SCOTUS, but people are increasingly corporations, at least for IRS purposes.

 

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Wed, 11/06/2013 - 10:50 | 4126719 Sudden Debt
Sudden Debt's picture

Where do they put the Area 51 expenses?

Wed, 11/06/2013 - 10:55 | 4126738 BoNeSxxx
BoNeSxxx's picture

So at $85B/month, the Fed is providing the US with free Social Security...

What could go wrong?

Forward Comrades.

Wed, 11/06/2013 - 11:03 | 4126781 Stackers
Stackers's picture

HHS and SSA really should just be one huge "welfare" colunm

Wed, 11/06/2013 - 11:22 | 4126870 tarsubil
tarsubil's picture

Essentially, all Medicare, Medicaid, and Social Security amount to is shuffling huge amounts of money around and taking a cut.

Wed, 11/06/2013 - 11:40 | 4126954 Broccoli
Broccoli's picture

Don't forget the Department of Agriculture does food stamps + farm subsidies and that is most of their budget. Think food stamps are the largest line item.

You can also find some form of welfare in every department so yea.....

Wed, 11/06/2013 - 11:48 | 4126986 Fredo Corleone
Fredo Corleone's picture

Correction:

"What The US Government Spent OUR Money On In 2013"

 

Wed, 11/06/2013 - 23:47 | 4129672 cornedmutton
cornedmutton's picture

It says Federal Reserve Note, not Fredo Corleone Note. (it's someone's money...not yours though)

Wed, 11/06/2013 - 10:56 | 4126748 EscapeKey
EscapeKey's picture

Krugman's aliens paid for that back in 2281.

Wed, 11/06/2013 - 10:58 | 4126755 Mi Naem
Mi Naem's picture

"Where do they put the Area 51 expenses?"

Bureau of Birth Certificates

Wed, 11/06/2013 - 11:23 | 4126880 James-Morrison
James-Morrison's picture

Is that where Obama's is?

Wed, 11/06/2013 - 13:33 | 4127458 jerry_theking_lawler
jerry_theking_lawler's picture

Exclude all items not originally granted in the Constitution and guess what......we would have the richest citizens in the world....ahhhh, progress.

Wed, 11/06/2013 - 13:48 | 4127544 Crash Overide
Crash Overide's picture

So they spend all the money on sick people and wars...

Wed, 11/06/2013 - 10:57 | 4126727 LawsofPhysics
LawsofPhysics's picture

I see that the capital and resource mis-allocation and mal-investment continues.  (And this does not even include the off-balance sheet expenses at the CIA and pentagon)

hedge accordingly.

Wed, 11/06/2013 - 11:02 | 4126778 Anusocracy
Anusocracy's picture

As far as I'm concerned, all the categories should be zero.

Sell the one million square miles of America that the US government owns and buy out as many SS entitlements as possible.

Wed, 11/06/2013 - 11:20 | 4126865 LawsofPhysics
LawsofPhysics's picture

So long as you are selling it for something fucking real and taking possession of that asset, go for it.

Wed, 11/06/2013 - 12:53 | 4126864 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The black budgets are baked into the overall DOD budget. The true off balance sheet stuff well if the SEC ever actually did it's job......... But in fairness that is true 'off the books' income.

Wed, 11/06/2013 - 10:55 | 4126733 Confused
Confused's picture

Still living with the misguided idea that the bulk of government spending goes to defense? Wrong.

 

Let me get this straight....we don't believe any .gov statistics that get released, but we actually believe that they report the correct amounts for defense spending? 

Oh, right, those are black budget items, hidden from even the people in power. 

 

Regardless, government spending is theft.

Wed, 11/06/2013 - 10:59 | 4126758 butchee
butchee's picture

What is your best estimate for the black budget items since 2000? 5T, or more?

Wed, 11/06/2013 - 11:09 | 4126805 duo
duo's picture

The US is a PPO/HMO that happens to have a military.

Wed, 11/06/2013 - 11:12 | 4126821 Carl Popper
Carl Popper's picture

Well said

Wed, 11/06/2013 - 11:14 | 4126810 Anusocracy
Anusocracy's picture

I would make the argument that Defense is the most destructive and unnecessary spending. Defense also is the mainstay of government.

'Defense' is 90% Offense. Same as the police.

Wed, 11/06/2013 - 11:29 | 4126901 MachoMan
MachoMan's picture

Unless you want a reserve currency...  which pays for the rest of the bills...

Wed, 11/06/2013 - 11:49 | 4126991 Wyatt Junker
Wyatt Junker's picture

Actually, no.  The most destructive spending are medicaid/care and SS since they are entitelments which the polis use to bribe dumbshits with, turning them into dependent whining asshole layabouts which decimates real productivity.  Its almost like have a national defense aimed at our GDP.

As far as 'defense' spending goes, its too high, but at least its the only Constitutionally legal spending authorized by the Federal Fuck Wipes.

Police?  Well, they just want a pension, a gun and a jelly donut, in that order.

Wed, 11/06/2013 - 13:22 | 4127415 pods
pods's picture

The Navy is Constitutional, the Army was specifically not authorized (standing army).  Marines same as the army. The Air force, well they didn't have flying machines back then, but we didnt give the government authority by an amendment so no, that one isn't constitutional either.

pods

Wed, 11/06/2013 - 15:12 | 4127921 balanced
balanced's picture

I agree that SS is bullshit wealth confiscation, and that the people should be left alone to invest their money as they see fit. I know that it's a ponsi scheme which is unsustainable. That being said, when I see people make comments like yours in which you refer to SS as an entitlement, I wonder... Do you acknowledge the fact that most people receiving SS benefits now have paid into that system for decades? Does anyone know the average payout vs. the average pay-in for Social Security? I just can't imagine that many people are getting back much more than the amount that they paid in plus the interest they'd have earned. When I was a kid, for a while there you could get a savings account that accrued 10% interest 10%!

This is an honest question.

Thu, 11/07/2013 - 03:46 | 4129974 Confused
Confused's picture

Is it an entitlement if you've paid in? 

 

</sarc>

Wed, 11/06/2013 - 15:19 | 4127946 Anusocracy
Anusocracy's picture

I'm not sure where the Constitution calls for naval bases all over the world. And of course, the MIC is a huge benefit for those outside the MIC. No 'entitlements' there.

Wed, 11/06/2013 - 11:30 | 4126908 GeorgeHayduke
GeorgeHayduke's picture

Good point. Nobody believes government stats UNLESS they support their ideological viewpoint.

Wed, 11/06/2013 - 12:07 | 4127067 Clycntct
Clycntct's picture

Good point and wake up.

We only believe the BS we like.

Wed, 11/06/2013 - 14:27 | 4127730 zanez
zanez's picture

VA and civil defense should be added in as well. why would taking care of injured / retired soldiers not be part of defense costs?

Wed, 11/06/2013 - 10:55 | 4126743 EscapeKey
EscapeKey's picture

I was under the belief that a large amount of health+social services cost was for active and retired personnel?

 

Wed, 11/06/2013 - 11:03 | 4126782 Chaos_Theory
Chaos_Theory's picture

Retired = VA

Active = Operations and Maintenance budget within the Defense budget. 

Suppose it would be appropriate to add the VA lines to the DoD ones for an honest accounting.  BTW, what the heck is "Other Defensive-Civil?"  Is that DHS and their 2 billion HP rounds and MRAPs? 

Wed, 11/06/2013 - 11:26 | 4126889 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

They play games also with shifting the liabilities around. It is a typical accounting trick. Pensions for veterans are not under the DOD budget but hidden in the Post Office operating budget as pension liabilities. They classify it as a general civil service thing to shift numbers around on the books.

Wed, 11/06/2013 - 12:40 | 4127222 dark_matter
dark_matter's picture

A lot of active military and vets receive food stamps and other .gov benefits, another hidden military cost.

Wed, 11/06/2013 - 10:56 | 4126746 Dr. Engali
Dr. Engali's picture

OPM? Isn't it all other people's money? I guess this is the porn and hookers fund.

Wed, 11/06/2013 - 12:12 | 4127088 Agent P
Agent P's picture

and Obamaphones

Wed, 11/06/2013 - 11:00 | 4126753 JustObserving
JustObserving's picture

Defense spending? It declined once again to just over $600 billion

Since when did you start believeing government figures?  The real defense budget is nearly twice the official figure.  2013  defense spending is about a trillion ($994.3 billion) not $600 billion:

The Real Defense Budget

 

While everyone knows that the defense budget is large -- even in the numbers that the public sees as the formally admitted figures by the Department of Defense -- the truth is that when one scratches beneath the bureaucratic veneer, national security spending is much larger, nearly double the amount US citizens are told.

A Republican, numbers-compulsive defense wonk at the Center for Defense Information, Winslow Wheeler, has published a great summary of what America's defense budget 'really' is. 

http://www.theatlantic.com/politics/archive/2012/02/the-real-defense-budget/253327/

 

Wed, 11/06/2013 - 11:03 | 4126783 rationaldemocracy
rationaldemocracy's picture

Who was the last president before Obama to cut defense spending?

Wed, 11/06/2013 - 11:23 | 4126882 RSloane
RSloane's picture

Who was the last president before Obama who threatened to bomb another country based on youtube vids?

Wed, 11/06/2013 - 11:55 | 4127012 Buckaroo Banzai
Buckaroo Banzai's picture

Who was the last president before Obama who sucked a cock?

Wed, 11/06/2013 - 11:01 | 4126769 Taffy Lewis
Taffy Lewis's picture

I remember Ron Paul saying in an interview, to paraphrase: "I'll cut a half trillion on the left (extending his arm out with palm open to his left) and I'll cut a half trillion on the right (extending his arm out with palm open to his right). There, problem solved."

Way too much common sense and why I will never vote again and why I am withdrawing from society and not participating as much as I possibly can. As most of this country is going down the toilet, I am standing safely to the side and waving down as it gets flushed. Fuck the oligarchy, fuck the Free Shit Army.

Wed, 11/06/2013 - 11:05 | 4126790 rationaldemocracy
rationaldemocracy's picture

would the free shit army be the 50 millions Americans who struggle to feed themselves ? You should donate your heart to ron paul when he has the inevitable heart attack - I am sure the donor match will be perfect.

Wed, 11/06/2013 - 11:17 | 4126849 Carl Popper
Carl Popper's picture

There is no struggle. Food stamps and HUD and SSI ensure that they arent motivated to push an ice cream cart or engage in some other value added efforts.

Necesity and the desire to ward off hunger are the mothers of invention

Wed, 11/06/2013 - 11:29 | 4126902 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

There is a fine line between charity and dependency. Giving one time in need is charity especially when you don't expect anything in return for it, giving over and over without other actions to lift an individual up creates dependency. Feeding the poor is a charitable thing when you have excess but you also need to provide a pathway and resources for them to be able to lift themselves up when they are down at the same time.

Wed, 11/06/2013 - 11:54 | 4127010 Wyatt Junker
Wyatt Junker's picture

I'd have more peace at night knowing that the mountain of taxes I pay were doused in lighter fluid and set afire rather than stolen the way they are and used to buy votes (mostly) by one political party to create permanent wards of the state.

Its almost like my taxes are stolen to help elect Harry, Nancy and Barry.

Wed, 11/06/2013 - 13:09 | 4127111 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Stop paying taxes or cheat them for every last penny. Starve the beast. Once the misallocation stops then you give consent by participating. Vote with your wallet also.

Wed, 11/06/2013 - 18:33 | 4128560 Zymurguy
Zymurguy's picture

Great idea... let me know when you get that witholding law changed, mmmmkay?

Wed, 11/06/2013 - 11:38 | 4126941 PT
PT's picture

Hunger is notoriously unreliable at providing capital and innovation.  Sometimes it does, most times it doesn't.

Wed, 11/06/2013 - 12:02 | 4127034 Carl Popper
Carl Popper's picture

It will provide labor. Labor can build capital thru sweat equity.

I am tired of seeing lazy waddling fat fucks pull out their EBT card at walmart.

A little hunger would slim them down and get them healthy enough to work.

Wed, 11/06/2013 - 13:30 | 4127449 Watauga
Watauga's picture

When's your 14th birthday?

Wed, 11/06/2013 - 18:31 | 4128554 Zymurguy
Zymurguy's picture

I understand that some folks are stuck in dilema... too many babies, no daddy, can't afford day care so they can train for a job or go to school.  I get that and I know that some folks need the financial help.  However, the least these fucking moochers could do is come over to my place on the weekend and mow the fucking yard and put those kids to work freshening up the mulch and trimming bushes/trees.  Maybe do a little cleaning.  I mean we pay and pay and pay and pay year in and year out and I have a full time job + a freelance job + volunteer for civic organizations... all of which keeps me from spending time with my kids.  Shit, mowing the lawn while I play catch with my boys is the least these fucking moochers can do.

Wed, 11/06/2013 - 11:25 | 4126887 Anusocracy
Anusocracy's picture

I remember a Harry Browne speech in the 90s where he said that the first thing he would do as President was sign an executive order reducing federal spending to seven hundred... dollars.

Wed, 11/06/2013 - 11:01 | 4126771 rationaldemocracy
rationaldemocracy's picture

is VA veterans affairs? How can the government justify spending more money on VA than on transportation or education?

The government needs to do something

 

Wed, 11/06/2013 - 11:07 | 4126797 yogibear
yogibear's picture

It is. It's spending more money on other special interest like illegal aliens and planning a new war in the middle east.

Wed, 11/06/2013 - 11:09 | 4126803 Dr. Engali
Dr. Engali's picture

The government is doing something....enabling the fed, robbing us blind, shipping the jobs overseas, and clamping down with the police state. What moar would you like them to do?

Wed, 11/06/2013 - 11:34 | 4126923 the grateful un...
the grateful unemployed's picture

governments care for veterans amounts to shameful neglect. there are literally thousands of orgs out begging for charity to help these guys because government wont, and if you want to know what your chances of getting fair shake from usg after the war is over ask the agent orange victims how they have been treated

Wed, 11/06/2013 - 11:42 | 4126955 PT
PT's picture

Big MIC plus lots of wars = lots of vets = big VA.

Soldier beware:  Maybe in future they plan to have less VA. 

Wed, 11/06/2013 - 14:02 | 4127613 artless
artless's picture

I'll justify it for ya. Any and all FEDERAL money spent on "transporation" or "education" is UNCONSTITUTIONAL. Period.

And as for the VA at least one might find a tenuous link in that it is supposed to be about taking care of the poor SOBs that have been conned into doing the government's killing over the years which has mostly been done by the military which at least, again has a tenuous link to being constitutional.

There got that?

For someone with the word rational in their screen name, you actually want these fucktards in DC to have ANYTHING to do with eduction?

Are you fucking kidding me?

Wed, 11/06/2013 - 11:02 | 4126776 Kirk2NCC1701
Kirk2NCC1701's picture

They spent money on OPM (Other People's Money)?

Seriously though, like in any Pareto of problems, you focus exclusively on the tallest poles. In this case, on the first 4.

Cut back 10% immediately, and then 5% per per, for the next 10 year's. Of course the Boomers will go 'boom' and the banksters plus DoD will join in.

We are screwed, no matter what. The feudal masters are back after 100 years, thanks to the Fed, POTUS, CONgress and SCOTUS ("Corporations are people too").

Wed, 11/06/2013 - 11:06 | 4126792 yogibear
yogibear's picture

Socialism and Military. What country from the past does that remind you of?

The old Soviet Union. 

Wed, 11/06/2013 - 11:11 | 4126816 Burticus
Burticus's picture

Defense?  There is no spending on "defense."  The primary purpose of standing armies has always been to protect the homeland from invasion.  The United State_ has left its Mexican border wide open for decades, allowing 20 million anonymous foreigners to invade & colonize the states, no papers, no nothing.

Howver, the same gubbermint does spend trillions on OFFENSE, invading & occupying other sovereign nations, maintaining hundreds of military bases in 150+ countries across the globe, buying expensive equipment to murder thousands of brown people, paying to treat and support young men maimed in the process, spying on its citizens, and cavity searching our grandmothers, groping our wives and irradiating our children traveling between states.

Of course, offense spending is third only to printing and borrowing cybercurrency to buy votes from old people and handing the bill to jobless young people with no future.

Wed, 11/06/2013 - 13:08 | 4127359 ManWithaPlan
ManWithaPlan's picture

You forgot about uranium depleted ammunitions! Im sure those cost a pretty penny..I mean, OF COURSE we need uranium depleted munitions when our enemies top of the line weapon is an RPG and an AK..makes perfect sense.

Wed, 11/06/2013 - 11:12 | 4126817 roadhazard
roadhazard's picture

The defense budget is bigger than SS. Where is NSA, DHS, TSA, FBI, Secret Service, CIA, black budget, plus a couple more I don't even know about.

Wed, 11/06/2013 - 11:15 | 4126833 tl3659
tl3659's picture
Title should read... "What The US Government Spent our Money On In 2013"
Wed, 11/06/2013 - 11:19 | 4126856 therealmonty
therealmonty's picture

Fuck you....what about the Black Budget????  Trillions

Wed, 11/06/2013 - 12:08 | 4127070 Kirk2NCC1701
Kirk2NCC1701's picture

Remember the $2 Trillion missing from the DoD that Rumsfeld could not account for (was clueless) on 9/10/2001?

Lucky for him/Bush, 9/11 happened a day later. As a response to skeptics who asked: "How are you gonna talk your way out of this one, Mr. Secretary?", he answered: "Watch me".

Wed, 11/06/2013 - 11:21 | 4126862 highwaytoserfdom
highwaytoserfdom's picture

The Defense is miss reported it should be reported as Defense/offense and the 400b from the treasury on 2T FED debt.   The interventionist offense Defense department is immoral.   Look at the Virgina election map half a dozen counties where 59b or 13.9% GDP defense....NEVER MIND OTHER RELATED WASHINGTON K STREET DRIVEN TRAITORS TO FREE MARKET.     It is not health care FDR put the Blues in Quasi Public in the 1930's..  It is the usury finance...  Audit the FED and let the free market rule.. The failure of corporation to allocate capital for growth (stock buy back supply constraint) has turned the Trust in Fiat all around....     Total lack of moral leadership.

Wed, 11/06/2013 - 11:36 | 4126875 socalbeach
socalbeach's picture

Where is this article getting $400 b in interest payments?  Ending 9-30-2013, yearly total interest expense (FYOINT in FRED) was $221.265 b.  Federal Reserve yearly interest rebates as of 12-31-2012 were $88.9 b.  Even allowing for a reduction in rebates in 2013, the difference is nowhere near $400 b.

Could they be counting the "interest" the government pays SS (and possibly other intra-governmental agencies), and which is invested in gov't "bonds" which cannot be sold in the bond market?

http://www.ssa.gov/oact/progdata/fundFAQ.html#a0=1 (example of double-talk below)

"By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash."

Wed, 11/06/2013 - 13:37 | 4127479 highwaytoserfdom
highwaytoserfdom's picture

socalbeach I guess that is why FED bosted bond buy to ~ 90b a month....     LOL

Wed, 11/06/2013 - 11:30 | 4126913 the grateful un...
the grateful unemployed's picture

the war in Iraq went from 1T (when it was first proposed) to 2T after we started throwing money out of the back of pickup trucks, and 6T when they started to seriously look at the numbers. (after the war had ended). we still have the largest US embassy in the world i believe, which needs staffing of course. and i am also certain than when our troops leave Iraq, that a rather sizable mercenary contingent remains, budgets under what? homeland security?

Wed, 11/06/2013 - 12:00 | 4127038 Wyatt Junker
Wyatt Junker's picture

Indeed, and the most expensive embassy in the entire world right now are our own airports thanks to Shrub and his half a million man army of (quickly) unionized airport wand waivers.  'Defense' is now being used against us every day through Homeland.  This will only increase as the entitlements drain us out and send us headlong into martial law accordingly, as planned.

Wed, 11/06/2013 - 11:34 | 4126920 PT
PT's picture

How many tax payers do you guys have?  100 million?  So a trillion bucks per year works out roughly 10 grand per tax payer which comes to roughly 200 bucks per week.  850 billion roughs out to 170 bucks per tax payer per week.
Health care plus soc sec plus DoD plus treasury roughly 170 + 170 + 120 + 80 = roughly 540 bucks per tax payer per week.  How much is average weekly earnings again?  How much tax?

What % paid unemployment benefits?  How much is unemployment benefits (for single male)?  -->>> dollars per tax payer going into unemployed guy's pocket vs bloat - admin, welfare mums, cheap housing etc etc etc

How often do you see a doctor?  It costs you about $170 per week whether you're sick or not.

Just wonderin' aloud.

Wed, 11/06/2013 - 11:34 | 4126922 falak pema
falak pema's picture

Half way measures and two way impasse. Where is plan C?

No war ramp up, more dope care and less hope care. 

Wed, 11/06/2013 - 11:36 | 4126936 Freewheelin Franklin
Freewheelin Franklin's picture

What about interest payments on the debt, or is that considered "defense spending". 

Wed, 11/06/2013 - 12:47 | 4127253 odatruf
odatruf's picture

That's part of the 400 billion Treasury figure.  About $220 odd billion is interest.

Wed, 11/06/2013 - 11:40 | 4126953 Reaper
Reaper's picture

The government wizard's right hand has provided these nice pictorial graphs for your diversion from following his left hand.

Wed, 11/06/2013 - 12:00 | 4127035 eaglerock
eaglerock's picture

I believe the Republicans are on the right track with trying to cut spending, but they lose me when they say any defense cut is off the table.  I read about how many golf courses the military owns, how many bases all over the world; none of this worth discussing?  If you are for small government, you have to look at all government spending, including defense spending.

Wed, 11/06/2013 - 12:20 | 4127118 Clycntct
Clycntct's picture

Go Red team Go Blue team Fight Fight Fight!

Wed, 11/06/2013 - 12:26 | 4127133 Incubus
Incubus's picture

follow the money.

 

You have a population of uneducated slobs who are looking for handouts. 

 

In a proper society, you'd be less interested in strongarming other nations and you'd be spending money to educate your fellow citizens so you didn't have to be treated with the pleasure of walking amongst pleasure seeking idiots who think that there's any point in life in which you should stop learning.  It's almost pathetic walking out in public with the knowledge (indicative by their patterns of dress, demeanor, purchases, topics of discussion, et cetera) that they're hardly more intelligent than a certifiable mentally challenged person.

 

Of course, an educated and engaged population is the last thing any societal owner wants.  Keep enabling the system, you silly idiots.  This is precisely what you get time and time again. 

 

"Don't give me none of that education shit! I gots more important shit to do!"

Wed, 11/06/2013 - 12:31 | 4127178 MrBoompi
MrBoompi's picture

How have we paid for the wars in Afghanistan, Iraq, Libya, and Syria?  (And who knows where else?)

Wed, 11/06/2013 - 12:35 | 4127199 shovelhead
shovelhead's picture

Just keep spending. No problem, it goes on a tab that can never be paid.

The key feature is that 6% that does get paid to the Fed. That's all that matters. We can do this forever internally, but at some point all those external creditors are going to want their money and/or refuse to accept dollars.

Then things get interesting.

Wed, 11/06/2013 - 12:38 | 4127214 Ajax4Hire
Ajax4Hire's picture

The United States still spent $400B (that is $1300 per US citizen) paying interest on the low interest rate Treasury Bills.

I now see why the Treasury keeps interest rates low.  If the rate goes up, then the interest payment burden will be more than defense.  When you spend more paying your credit card interest than you do to protect you home, you are in serious trouble.

So on a per person basis, the US Federal government: increased my debt burden by $4500 and used $1300 just to pay interest on the US Credit Card.

The US Federal government is in trouble now, moving to serious trouble soon.  The one reality that is not understood by politicians is people and companies can move.  If Canada, Mexico, Bahamas or even Google-Offshore offers citizens safety and security, then the ones with money will move.

This is not an academic point, it is reality.

In the 1930s, Germans who could move did.

In the 1970s, Russians who could "escape" the USSR did.

In the late 1990s Virginia, millionaires who could move did to escape the millionaire tax.

California is loosing Movie Studios, Movie Stars and the millions that go with it as they move to lower tax states.

When Facebook went public, who "moved" to Singapore?

Wed, 11/06/2013 - 12:39 | 4127217 Fix-ItSilly
Fix-ItSilly's picture

We have effectively been at peace, outside of some outrageous policing activities, for 8 years.  A defense budget like this is not just obscene, but irresponsible.

 

And Social Security is drawing down on $2.7T of US Treasurys, assets purchased over the past 4 decades of tax overscharges to pay for the actuarially expected current baby boomer retirement period.  So to position SS against Medicaid/care is journalistically irresponsible.

Wed, 11/06/2013 - 14:15 | 4127672 el Gallinazo
el Gallinazo's picture

Exactly!  The majority of the payments for these programs, particularly SS are coming from current revenues.  For SS, the diference is made up from the "lock box" (remember the lock box?)  Exactly what it is and where it is located is an item of some conjection.  Some suspect that it is simply an old file cabinet located in northern Virgina stuff with T bonds.

Wed, 11/06/2013 - 14:12 | 4127658 RabbitChow
RabbitChow's picture

Well, this puts things right into perspective.  The most recent, and most punitive judgement against a bankster crook was what $2 billion?  And exactly how does that compare to the nearly one trillion spend by DOD, HHS, or SSA?  That wouldn't even be a thin line in comparison (although on the plus side, not the debit side).

Wed, 11/06/2013 - 14:12 | 4127659 RabbitChow
RabbitChow's picture

Well, this puts things right into perspective.  The most recent, and most punitive judgement against a bankster crook was what $2 billion?  And exactly how does that compare to the nearly one trillion spend by DOD, HHS, or SSA?  That wouldn't even be a thin line in comparison (although on the plus side, not the debit side).

Wed, 11/06/2013 - 15:59 | 4128084 no more banksters
no more banksters's picture

"If one take a look at the data, can see that the share of the US government debt held by the "Federal" Reserve reached record levels in 2011, reaching 11.2% of GDP, the highest since 1940 onwards, and possibly the historically higher. In 2012, this rate was also high at 10.6% of GDP. Only once this figure reached such levels, in 1946, i.e. shortly after the end of WWII, when it reached 10.7% of GDP."

http://failedevolution.blogspot.gr/2013/10/new-deal-vs-obamacare-one-rea...

Wed, 11/06/2013 - 16:50 | 4128278 fanglemeister
fanglemeister's picture

Not completely fair to say Social Security, Medicare etc are entitlements, as people do pay in to get money out, but it is fair to say the trend IS for people to get more out than they put in, and that needs to change.  Problem is, the life expectancy has gone up so much higher since its inception - the actuarial tables just don't add up any more, payouts have become unsustainable.

According to an article in Money magazine:

Many people wonder if they will get back at least the amount they contributed in retirement. The answer largely depends on when you retire and how much you've earned over your lifetime. Consider a single man who earns the average wage throughout his career ($43,100 in 2010 dollars), works every year from age 22 to 64, and then retires at age 65 in 2010. Over his lifetime he has paid $345,000 into the system. But he is likely to get back $72,000 more than that, or $417,000 in Social Security and Medicare payouts, according to recent Urban Institute calculations. A single woman with the same work and tax history will come out even further ahead due to her longer life expectancy, likely netting $464,000 in lifetime benefits, which is $192,000 more than she paid into the system. These amounts are in constant 2010 dollars and assume a 2 percent real interest rate.

Medicare benefits are the main reason most workers are coming out ahead. A male earning the average wage throughout his working life who retires in 2010 paid $55,000 into the Medicare trust fund, but is likely to receive $161,000 worth of Medicare benefits, the Urban Institute found. In contrast, he pays $290,000 in Social Security taxes throughout his career and collects $256,000 in retirement payments.

Married couples generally benefit the most from Social Security and Medicare payments, especially when one spouse earns significantly more than the other. A two-earner couple with one spouse earning the average wage each year ($43,100 in 2010) and the other spouse earning 45 percent of the average wage annually ($19,400 in 2010) who both retire in 2010 will get back $300,000 more in retirement benefits than they paid into the system. A couple with this earnings history would pay $500,000 in taxes over their lifetime, but get back $800,000 in benefits.

When both members of the couple earn the same average wage over their working life, they get back $192,000 more than their tax contributions. In this case the spouses paid $690,000 in Social Security and Medicare taxes and are likely to get $882,000 worth of benefits in retirement.

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